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Industry linked to defense

AUSTIN - Some ethanol supporters say providing taxpayer subsidies to their industry can be justified as a matter of homeland security because a healthy agricultural economy is vital to national defense.

Farmers should use the same arguments as the airline executives who requested $24 billion in loan guarantees, said David Swinford, a Texas legislator whose mostly rural district is interested in creating an ethanol industry.

"There is no guarantee that Arab countries can maintain production of oil, or that we can maintain importation of oil," he said.

Ethanol, a fuel derived from corn, grain and other carbohydrate-rich crops, is already used in Midwestern states as an emissions-reducing additive in place of MTBE, a petrochemical byproduct currently under scrutiny by environmentalists. Some vehicles can run on a blend of gasoline called E85, which is 85 percent ethanol.

Although the so-called biofuel is renewable and environmentally safe and can be produced domestically, its viability is questioned because of the 54-cent-per-gallon federal tax subsidy it receives, some say.

"If they're subsidizing ethanol, they're subsidizing corn," said Charli Coon, a senior policy analyst for energy and the environment at The Heritage Foundation, a conservative policy group in Washington. "Then what about peas or anything else? Where do you draw the line on what to subsidize?"

However, Ms. Coon acknowledges a diverse energy supply is vital to national security.

"Clearly, the more dependent the United States becomes on oil from the Middle East, the more influence instability in that region could have on the economy," she said.

Other countries have used ethanol to reduce their dependence on foreign petroleum. In Brazil, 44 percent of vehicles drive on 100 percent ethanol; the remainder run on gasoline that is at least 22 percent ethanol.

The United States imports about 56 percent of the oil it consumes. Much of it comes from anti-Western countries in the Middle East, including Iraq, which last year sold the United States 600 million gallons of oil.

"For every gallon of crude we bring in from Iraq, Iran, Syria - all we're doing is supporting terrorism," said Red Roberts, owner of United Energy Distributors Inc. in Aiken, the nation's first biofuel retailer.

Oil imports account for 80 percent of the $376 billion U.S. trade deficit, according to the American Coalition for Ethanol. The deficit could be reduced by $1.1 billion a year simply by replacing MTBE with ethanol and its derivatives nationwide.

Sunday: With stricter environmental laws and ongoing political unrest in the Middle East, many in rural America say the answer to the country's energy woes is ethanol, a fuel additive made from corn.

Tuesday: United Energy Distributors in Aiken is the nation's first "biofuel retailer," according to the National Ethanol Vehicle Coalition.

Wednesday: The United States depends on foreign oil while many other countries, including Brazil, have vehicles burning 100 percent ethanol.

Thursday: Energy company Diamond Shamrock was talking about building an ethanol plant in rural Dumas, Texas, but things got quiet after the company was acquired by a major oil producer.

Friday: Researchers say they are improving ethanol to the point where the natural fuel performs as well as gasoline.

Saturday: An expected increase in ethanol demand has Midwestern states vying to be the market leader.



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